Good morning, traders. As mentioned yesterday, a fall below the channel support would likely indicate further downside and so it was. Again, this is why risk management is of the utmost importance. I was stopped out in profit and I hope you were too. If you follow me on Twitter, then you know I floated the idea of this correction being a triangle/pennant. Why? Because the daily seems to be printing a clear repeating ABC pattern. However, that also means that price could be printing a 3-3-5 flat, as I have mentioned as well. If the latter is true, then we should most likely be expecting price to ultimately retrace to at least $9100 as this downward movement would be the C wave of that correction.
If it is a pennant, then we generally shouldn't expect price to drop any lower than the daily pivot level which is around $10700. That doesn't mean it can't wick down below it, but we should see the pivot hold as support. This is important to understand because We would expect to see continued ABC patterns printing and currently we would be just about halfway through the pattern. That puts us on the C wave of that pattern as well.
So far, price has found support on the daily 21 EMA and the previous two 4H candles suggest a possible reversal, at the TR's EQ. There is also hidden bullish divergence printing at this time on the 4H TF. We need to see follow-through with a larger candle spread demand candle now to confirm this. While everyone on CryptoTwitter is freaking out about yesterday's downward price movement, the reality is that supply volume has been dropping within this correction over the past two weeks and price has been supported by the daily pivot so far. If price can close here or higher today, then the 3D Stoch RSI should print a bullish cross. The 6H Stoch RSI will print a bullish cross if price closes four hours from now at this price or higher. The 4H Stoch RSI has been bottomed out since mid-afternoon yesterday. Price is also sitting above the 4H pivot, so there's a lot of potential for a bounce up toward the top of the TR around $12000-$12400, at least, before possibly resuming movement down in one of the two scenarios mentioned above.
Lower TF price action appears to be printing a large descending broadening wedge with a target of $12585 on Bitmex if price can get through the wedge's resistance. Traders should be mindful of the $12150 level as price progresses that way. Hitting the wedge target puts price above the M15 pivot and the 1H 21 EMA. The 1H Stoch RSI is pretty high, so we may see a small pullback on the smaller TFs before price pushes through the wedge's resistance. While RSI on the 1H has a lot of room to run if demand can overcome supply, it is also showing some likely hidden bearish divergence at this time.
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Be sure to hit the "thumbs up!"
Every day, we have a choice to act positively or negatively, so if you get a chance, do something decent for someone today which could be as simple as sharing a nice word with them. You just might change their day, or even their life.
You can always click on the "share" button in the lower right hand of the screen, under the chart, and then click on "Make it mine" from the popup menu in order to get a live version of the chart that you can explore on your own. When you do, be sure to explore the other TFs to see what I'm watching on those TFs.
If it is a pennant, then we generally shouldn't expect price to drop any lower than the daily pivot level which is around $10700. That doesn't mean it can't wick down below it, but we should see the pivot hold as support. This is important to understand because We would expect to see continued ABC patterns printing and currently we would be just about halfway through the pattern. That puts us on the C wave of that pattern as well.
So far, price has found support on the daily 21 EMA and the previous two 4H candles suggest a possible reversal, at the TR's EQ. There is also hidden bullish divergence printing at this time on the 4H TF. We need to see follow-through with a larger candle spread demand candle now to confirm this. While everyone on CryptoTwitter is freaking out about yesterday's downward price movement, the reality is that supply volume has been dropping within this correction over the past two weeks and price has been supported by the daily pivot so far. If price can close here or higher today, then the 3D Stoch RSI should print a bullish cross. The 6H Stoch RSI will print a bullish cross if price closes four hours from now at this price or higher. The 4H Stoch RSI has been bottomed out since mid-afternoon yesterday. Price is also sitting above the 4H pivot, so there's a lot of potential for a bounce up toward the top of the TR around $12000-$12400, at least, before possibly resuming movement down in one of the two scenarios mentioned above.
Lower TF price action appears to be printing a large descending broadening wedge with a target of $12585 on Bitmex if price can get through the wedge's resistance. Traders should be mindful of the $12150 level as price progresses that way. Hitting the wedge target puts price above the M15 pivot and the 1H 21 EMA. The 1H Stoch RSI is pretty high, so we may see a small pullback on the smaller TFs before price pushes through the wedge's resistance. While RSI on the 1H has a lot of room to run if demand can overcome supply, it is also showing some likely hidden bearish divergence at this time.
_____________________________________________________________
Be sure to hit the "thumbs up!"
Every day, we have a choice to act positively or negatively, so if you get a chance, do something decent for someone today which could be as simple as sharing a nice word with them. You just might change their day, or even their life.
You can always click on the "share" button in the lower right hand of the screen, under the chart, and then click on "Make it mine" from the popup menu in order to get a live version of the chart that you can explore on your own. When you do, be sure to explore the other TFs to see what I'm watching on those TFs.
